PAI 897
Lecture 3
Market equilibrium and market forces
A market is in equilibrium at the point where the demand and
supply curves cross.
The equilibrium price is the market price at which consumers
can buy as much as they want and sellers can sell as much as
they want.
The equilibrium quantity is the quantity demanded / quantity
sold at the equilibrium price.
The equilibrium price quantity pair (p*, q*) is the price and
quantity at which neither buyers nor sellers have an incentive to
change their behavior.
,
,
Lecture 3
Market equilibrium and market forces
A market is in equilibrium at the point where the demand and
supply curves cross.
The equilibrium price is the market price at which consumers
can buy as much as they want and sellers can sell as much as
they want.
The equilibrium quantity is the quantity demanded / quantity
sold at the equilibrium price.
The equilibrium price quantity pair (p*, q*) is the price and
quantity at which neither buyers nor sellers have an incentive to
change their behavior.
,
,
